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The CEO of Hulu Will Now Take Your Questions

There are three TV shows I have come to love even though I’ve never watched them on TV. Or on DVD. Or via iTunes. They are: Arrested Development, It’s Always Sunny in Philadelphia, and Rescue Me. And they are all available — the complete catalog, whenever you want, in high-quality video, with a beautiful user interface — on my computer, for free, thanks to Hulu.com.

Hulu is a likely game-changer for TV, an ad-supported site with, as of a few days ago, programming from three of the four major networks (as well as movies and lots of other video programming). ABC (Disney) has just joined NBC and News Corp. (Fox) in a joint distribution/ownership venture that, for TV viewers at least, is a major win. Hulu’s mounting success is a growing threat to Apple’s iTunes as well as Google/YouTube. As NBC’s Jeff Zucker told The Times: “Advertisers have made it clear that they want a safe environment unpolluted by videos of cats on skateboards.” (And, I would add, a comments thread straight out of a swamp, or maybe a j.v. locker room.)

In the following ad, featuring Rescue Me star Denis Leary, Hulu claims to be “an evil plot to destroy the world,” but it may be one of those ads that exaggerates just a bit.

Jason Kilar, Hulu’s CEO, joined the company after nearly a decade at Amazon.com, where he wrote the original business plan for Amazon’s video and DVD business and became senior vice president of the company’s Worldwide Application Software. As he tells it, Hulu’s super-clean look and feel was inspired, in part, by his first trip to Disney World.

Kilar has agreed to take your questions, so fire away in the comments section below. As with past Q&A’s, we will post his answers here in short course. I will prime the pump with a few of my own:

1. Even just a year ago, and certainly two, Hulu was hardly an obvious choice to be the front-runner in the online TV space. What happened? Tell us about a few tipping points, or lucky breaks, or wondrous negotiations.

2. Tell us a bit about ad revenues. I have read that you “stomp” YouTube in terms of revenue per user and per program — easy to believe — but how much money is coming in? With only a few ads per program, it is hard to imagine that revenues are very robust — especially considering that digital ad rates in other media (newspapers, e.g.) are dwarfed by their traditional counterparts.

3. Because a TV program on Hulu typically carries ads from just one sponsor, the branding seems to make a bigger impression than if that one sponsor buys one spot among many sponsors. What can you tell us about how this single-sponsor dynamic works, from both the user and advertiser ends?

greatone

May 4, 2009 @ 3:20pm

Mr. Kilar,

Last year Direct TV partnered with NBC to co-produce "Friday Night Lights" and debut the new shows exclusively on Direct TV. With TV ratings for most shows falling, can you envision any scenarios where Hulu might partner with a network to keep certain shows alive? If so, what might such a partnership look like?

Quin

May 4, 2009 @ 3:32pm

My experience with Hulu has been excellent overall. But why do you show the same exact ad several times during one show? There are often multiple available ads for a particular product, and the ad is almost always boring the second time. This doesn't seem to be in anyone's best interest.

Jeff

May 4, 2009 @ 3:33pm

what is the long-term goal of Hulu?

Bladt

May 4, 2009 @ 3:36pm

1. What are you plans to expand into cable programming? Will new technologies be needed? Is there support/interest from the cable/satellite folks?

2. What (if anything) is being developed to make watching Hulu easier on a television set. Is their support from the networks to make hulu more accessible in this method?

Also, thanks for the service. I cannot recall the last time I watched a show live.

Magnus Falk

May 4, 2009 @ 3:39pm

What are the real problems with worldwide distribution of TV-shows? We europeans are a bitt miffed by now by all these great services that never seem to go outside the US.

Tim H

May 4, 2009 @ 3:39pm

I must admit that my own perception of Hulu is that it's a sort of figurehead -- a device essentially controlled by the networks which is allowed to operate on condition of that control. In other words, I'm concerned that Hulu only exists so that the development of an Internet-based video marketplace can be slowed and redirected to benefit the major networks. After the example set by the music industry it's not surprising that the networks are terrified of a similar fate.

Can we be provided with any assurance that Hulu has some kind of real independence? Do you have any negotiating leverage that can be employed when the networks make demands that are ultimately to the detriment of Hulu and its users? Can you see yourself doing something dramatic like pulling a whole networks' shows?

Michael

May 4, 2009 @ 3:44pm

As a huge fan of Hulu and scripted television, I'm concerned that the revenue stream from internet video cannot support the budgets of non-reality network television. What is the future of big-budget original programming?

Casey Barker

May 4, 2009 @ 3:45pm

There seems to be an ongoing battle between Hulu and a number of media streaming device developers who are attempting to get Hulu content off of the computer and onto the living room HDTV. These devices only exist because they're filling a desire of the market, and it seems certain that the device developers will find a way around whatever technical barriers Hulu erects. So why does Hulu fight this battle at all? Is Hulu concerned that the advertisement stream could be sidestepped, or does Hulu have its own plans for the living room?

Gabriel

May 4, 2009 @ 3:46pm

I am a huge fan of The Office. I watch every week, not on my TV, but on NBC.com. Why should I start watching on Hulu? Although I don't always take advantage of it, there are always deleted scenes, character blogs etc. What are you doing to compete with these features?

Scottij

May 4, 2009 @ 3:46pm

Over the last few months, there have been several public cases where Hulu has pulled support from various third-party home media software (e.g. Boxee), apparently based on demands by one or more of Hulu's content providers.

Given that integration into additional media software increases Hulu's audience reach, why are the content providers insisting on such restrictions, and why is Hulu going along with it?

Nick

May 4, 2009 @ 3:49pm

Why is the advertising not more targeted? This medium has the ability to target consumers and the individual level, but when I watch the ads I find it hard to believe that the companies I see are paying to target me.

Craig Stacey

May 4, 2009 @ 3:52pm

A couple of months back,the content providers, who are not coincidentally your owners, ordered you to block the boxee application from accessing your streams. Boxee is trying to take the battle to the content providers and make sure they "get it".

Why do you think the content providers would try to dissuade a large audience who would willingly watch ads from using their service, when they must at least have a passing inkling that it would drive users to torrent sites for commercial-free (and, might I add, higher-quality image and sound) versions of the shows?

Nick

May 4, 2009 @ 3:58pm

Hi Jason,
My question is simple - when are you extending hulu to the UK? I guess tying up local advertising deals might account for the delay?

Brian Schuster

May 4, 2009 @ 3:59pm

Mr. Kilar,

As everyone here is pretty well aware of, the internet is rapidly evolving. How do you see the design and function of Hulu.com changing over the next five years?

Brian
cleverwebtech.com

Sally

May 4, 2009 @ 4:01pm

Jason, I love the service. It's made it easier to live without DVR. Netflix streaming recently moved onto Xbox Live. Will Hulu consider something similar? If I can get Hulu on my Xbox, I can finally clear my computer junk out of my living room completely. What do you see as the pros and cons of expanding onto Xbox Live?

EG

May 4, 2009 @ 4:01pm

Actually, the complete catalog of It's Always Sunny is no longer available on Hulu, and I believe this was a source of controversy between the site and its users.

Dan Souther

May 4, 2009 @ 4:03pm

Any plans to extend the availability of Hulu to TV sets, perhaps with a set-top box or something similar? That to me seems to be the final barrier to achieving massive growth that could make cable and satellite companies a thing of the past.

Aryeh

May 4, 2009 @ 4:05pm

Can you explain why Hulu content is not available outside of the U.S.?

Thanks!

Sam

May 4, 2009 @ 4:07pm

I like Hulu and don't really mind the 30 second ads every 15 minutes on popular shows. But my fear is that it won't be long before the ad content is just as annoying and lengthy as on normal TV. What is your plan to avoid that outcome?

David

May 4, 2009 @ 4:11pm

1. Will advertising revenue really be enough to cover your costs and provide an adequate return for you (and for Disney)?

2. Is Disney demanding exclusivity or prominent for their own products?

3. Is it possible to promote indie or poorly distributed programming in a profitablt manner? short answer: yes. You need to leverage the Long Tail Theory. Look it up.

4. Rhetorical question: Are you going to sell out and become a mainstream, widely-viewed, excessively risk-averse and not very interesting packager of flavorless dreck like the original networks ABC, NBC and CBS?

5. Can you license and broadcast shows that are currently running on conventional TV? I'm really suffering that my schedule doesn't let me watch Season 2 of In Treatment. I need to call my shrink.

6. Have you considered the counterintuitive strategy of launching a cable TV channel tied closely to Hulu.com? It's all going to converge in 5 years anyway, why not get a jump on it? That way you can get ahead of Disney who is still distracted with trying to sell kids' products based on their shows.